Proponents of Haywood room tax increase rebut criticism

The Haywood County Tourism Development Authority board responded to outcries from Maggie Valley business owners about a proposed lodging tax increase during its meeting last week.

Several business owners in Maggie voiced their collective concerns about the possible increase at a town meeting two days prior. A portion of the meeting was spent correcting misperceptions about the matter.

Some Maggie lodging owners get hackles up over room tax increase

The Maggie Valley Board of Aldermen got an earful from hotel and motel owners Monday during a nearly three-hour meeting held specifically to hear views about a proposed increase to the overnight lodging tax.

The Haywood County Tourism Development Authority and the county board of commissioners both unanimously approved the idea of a hike in the lodging tax — from the current rate of 4 percent to 6 percent. The Maggie Valley Chamber of Commerce has also written a letter of support.

Clear sailing ahead for Haywood room tax hike

If anyone opposes an increase in Haywood County’s overnight lodging tax, they did not make their enmity known at Monday’s board of commissioners meeting.

Audit finds vacation rentals dodging the lodging tax

A company hired by the Haywood County Tourism Development Authority has found a dozen businesses that have been evading a 4 percent lodging tax.

Room tax on the rise, a sign of hope in the tourism industry

Many counties are seeing an increase in tourism-related spending this year, but most have still not bounced back to their pre-recession numbers.

The only real way for counties to measure how many tourists are stopping in their towns is through its occupancy tax revenues — that is the amount of tax revenue it receives from visitors who stay overnight in a hotel. Though even that can be slightly misleading, since people may take a daytrip somewhere and then return home at night.

Room tax increase sails to passage in Swain

With little brouhaha or fanfare, the Swain County Board of Commissioners voted last week to nudge its room tax up 1 percent, less than two months after the idea was first floated publicly.

“We felt like it would be a good plus for Swain County,” said County Commissioner David Monteith. “It is not on the local people. It is on the tourists.”

The Swain County Tourism Development Authority first introduced the idea of an increase to commissioners in mid-January. It will go into effect in July.

The tax on overnight lodging stood at 3 percent before the vote. The increase will bring in at least an additional $100,000 annually and will be earmarked for special tourism projects.

“It’s a very good thing,” said Brad Walker, a Swain County Chamber of Commerce board member and chairman of Smoky Mountain Host.

The former Bryson City mayor said it would give the tourism agency flexibility to support special projects it currently doesn’t have a budget for.

“We are now trying to help develop attractions,” Walker said, adding that the county cannot do that without additional funds.

One project that the additional money could help with is the renovation of the historic courthouse in Bryson City into a visitor center and museum.

Another target for funding is the 2013 World Freestyle Kayaking Championships, which is expected to draw thousands of out-of-towners to the county. The tourism agency wants to post signage advertising the kayaking competition and help with beautification efforts near the Nantahala Gorge where the event will be held.

Swain County had one of the lowest taxes on overnight accommodations in the state. More than half of the counties in the state have a tax that is more than 3 percent.

Opponents of the increase, however, say it could hurt business.

The county should focus on advertising its comparatively low taxes, not jack them up, said Winfred Brooks, who has worked in the cabin rental business for 20 years.

“This is not the time to consider gouging traveling tourists anymore,” Brooks said. “Keep your taxes low you will get more visitors.”

Now, if someone pays $100 to stay the night in a Swain County hotel or inn, he or she will pay an additional $4 a night compared to $3 a night, not counting sales tax, to occupy the room.

Swain’s room tax collections increased 5 percent last year and 8 percent the year before that, making it one of the few counties that has escaped a downturn in its room tax collections as a result of the recession.

Last year, Swain County brought in $341,000. The money is used to promote tourism, mostly by advertising and marketing Swain as a destination.

The county can currently use up to 30 percent of its current room tax collections on tourism projects, including the Christmas lights featured throughout downtown Bryson City.

 

Room tax rates

• 3 percent: Clay, Graham, Macon, Mitchell, Yancey, Jackson*

• 4 percent: Haywood, Swain, Buncombe, Transylvania, Cherokee

• 5 percent: Henderson, Madison, McDowell

• 6 percent: town of Franklin, Watauga

*Jackson County has proposed an increase to 6 percent.

TDA looks to tax collector to crack down on delinquent tourism taxpayers

Delinquent payers of the tourism room tax in Haywood County will soon have the tax collector knocking on their door.

County commissioners approved a resolution that will allow the tax collector to recover money from hotel and motel owners not paying the county’s 4-percent occupancy tax.

“It’s not fair when you’ve got some people who are paying on time every month and some people quit paying,” said Lynn Collins, executive director of the Haywood County Tourism Development Authority. “Over the years, it has become an increasing problem.”

The tax is supposed to be tacked on to a tourist’s bill when they stay in a hotel, bed and breakfast or vacation home rental. Lodging owners then remit the tax they collect to the county on a monthly basis. The Tourism Development Authority uses revenue from the tax to fund advertising campaigns, area events and other tourism-related expenditures.

“How do you know if they’ve not paid?” asked Commissioner Kevin Ensley.

Collins said that she can read newspapers, look on websites or simply drive by lodging establishments that she knows are not paying and see them still accepting customers.

Room tax money is paid to the county finance office, which keeps a small percentage of the tax to pay its employees. However, the TDA was responsible for contacting businesses who were behind in their tax payment or those who did not pay. The TDA, however, does not have anything close to the authority that the county tax collector has. Tax collectors can garnish wages or take money directly from a business’ bank account if it is not paying.

For years, the tourism authority board has struggled with ways to bring accommodation owners into compliance. Each meeting, the board is presented with a list of people who owe overdue taxes.

“This is an ongoing issue,” said Commissioner Mike Sorrells, who also sits on the tourism board. “Every meeting, this is discussed.”

In some cases — continued delinquency or flat out refusal to pay — the TDA will still need to resort to legal action to collect its dues.

Swain ponders room tax increase

Swain County’s Tourism Development Authority will appeal to county officials for a 1 percent increase in the room tax rate.

The tax on overnight lodging currently stands at 3 percent. The proposed increase would bring in at least an additional $100,000 annually to support tourism initiatives.

Monica Brown, chair of Swain County’s Tourism Development Authority board, said the idea came from business owners who approached her about raising the tax. The extra money could help fund special projects without burdening local residents.

“Basically, there is a lot of capital stuff we would like to help the county with,” Brown said. “It would give us more funding to work.”

Such projects could include helping the Great Smoky Mountain Railroad construct an engine turntable or Bryson City restore the historic courthouse for a visitors center and museum. The extra funds could be used toward beautification efforts and signage near the Nantahala Gorge, the site of the 2013 World Freestyle Kayaking Championships expected to bring thousands of visitors to the county.

“(The tax is) more for promotion of tourism in Swain County overall and a main part of that is the appearance,” Brown said.

The county can currently use up to 30 percent of its current room tax collections on capital projects, including the Christmas lights featured throughout downtown Bryson City.

A 3 percent tax is already tacked on to a visitor’s room rate. If someone pays $100 to stay the night in a Swain County hotel or inn, he or she will pay an additional $3, not counting sales tax, to occupy the room. If the increase is approved, that visitor will pay an extra $1 — for a total of $4 — each night.

Brown said the authority wanted to be “conservative” so it will only seek a 1 percent jump in room tax, although state law allows a room tax of up to 6 percent.

Jackson County has recently proposed increasing its room tax to the full 6 percent. More than half the counties in the state already levy a room tax of more than 3 percent, with a definitive trend in recent years among counties to increase the rate.

The Swain County tourism agency is “Right in line with what we are doing across the state,” Brown said. “And, an increase in the room tax is not going to impact the number of visitors to your area.”

The tourism authority has raked in between $300,000 and $353,000 a year in room tax revenue since at least 2006. Swain is one of the few counties that has escaped a downturn in its room tax collections as a result of the recession.

“We have enjoyed pretty steady room tax numbers in Swain County,” Brown said.

The tax has remained at 3 percent since its inception in the 1980s.

The extra 1 percent would be kept separate from the other 3 percent, which funds mostly marketing and promotions, said Karen Wilmot, secretary of the TDA board and executive director of the Chamber of Commerce.

The Tourism Development Authority splits its advertising dollars between print and online media. About 70 percent of the advertising budget funds traditional print ads, while the remaining 30 percent targets Internet users. Like other Western North Carolina tourism agencies, Swain County’s TDA focuses its efforts in North Carolina, South Carolina, Georgia, Florida and Tennessee.

“We tend to take a really conservative approach to our advertising,” Brown said. “We try to do a lot with a little bit of money.”

The key to obtaining support for the 1 percent increase will be reminding residents of how the Chamber of Commerce and tourism authority has used the room tax to benefit the county, Brown said.

“I want everyone to understand the focus of the tax,” Brown said. “How it benefits the community as a whole.”

But, in order to obtain the increase, the agency must appeal to local government officials and its constituents for support.

“I honestly don’t know” when the measure could be put to a vote of county commissioners, Brown said.

The tourism agency will need to  discuss the possible increase with the county commissioners and then with its lodging owners before even thinking about the vote.

It’s a “lengthy procedure,” Brown said.

 

Mixed reviews

The idea of an increase received mix reactions from lodging owners in the county who had not heard about the possible change.

“I would not be wanting to add any more to my guest’s room fee than I need to,” said Ed Ciociola, owner of Calhoun House Inn & Suites. But, if it helps advance tourism in the county, he said he would approve of the rise.

A handful of inn, motel and hotel owners vehemently disapproved of the plan, however.

“I am definitely not in favor of any new taxes,” said Blain Slobe, owner of Two Rivers Lodge. “I don’t see raising the tax 1 percent as helping tourism at all.”

If people are spending more money each day on their room bills, they will cut down on the number of days they spend in Swain County, he said.

Several cited the still slow-growing economy as a crucial reason for forgoing the increase.

“I think 3 percent is high enough,” said Mercedith Bacon of West Oak Bed & Breakfast & Cabins.

Bacon said that the tourism agency does an adequate job with the resources it already has and that businesses are still fragile following the recession.

“I just don’t think this is the time,” Bacon said.

A couple of business owners said they would like to hear more information before deciding whether to oppose or support a 4 percent tax rate.

“I don’t think I can say yay or nay,” said Mort White, owner of Hemlock Inn.

Brown was not surprised by people’s responses when they initially heard about the potential increase and said she thinks the majority of business owners will eventually favor the move.

“I think there is almost a knee-jerk reaction” to oppose the tax, Brown said. “I think we just have to let them know what it’s going towards.”

 

By the numbers: Current tax rates

• 3 percent: Swain, Clay, Graham, Macon, Mitchell, Yancey

• 4 percent: Haywood, Buncombe, Transylvania, Cherokee

• 5 percent: Henderson, Madison, McDowell

• 6 percent: town of Franklin, Watauga

*Jackson County has proposed an increase to 6 percent.

 

Collection rate for Swain

• 2006-2007    $305,352  

• 2007-2008    $320,820  

• 2008-2009    $309,802  

• 2009-2010    $335,353  

• 2010-2011    $352,437

 

Share your opinion

The Swain Tourism Development Authority board meets at noon on the last Wednesday of each month at the Chamber of Commerce. This month, however, it will be held Jan. 18.

In a business where profit margins are small, hotel owners fear larger tax will drive tourists elsewhere

Running a small hotel in Western North Carolina isn’t the easiest way to make a living, particularly not in these penny-pinching times when prospective customers want a full range of amenities and a rock-bottom room price.

“It is hard for small businesses like this,” said Sneha Amin, who owns and manages the 22-unit Economy Inn in downtown Sylva. “People are not wanting to spend anything, because they don’t have anything.”

A plan is in the works to increase the tax on overnight lodging in Jackson County from 3 percent to 6 percent, as high as state law allows. The prospect has left Amin and other hotel owners in the area — large and small — on edge, worried that such an increase could further drive away the ever-dwindling number of visitors they depend on for survival.

But proponents say the room tax is needed to offset a decline in tourism revenue in Jackson County.  The increase will mean more money to market Jackson County as a destination, which in turn should increase tourism. That’s something supporters say Jackson County sorely needs as overnight stays are still off by 12 percent in Jackson compared to 2006.

Alleghany County, which is increasing its room tax from 3 to 6 percent this year as well, has experienced similar ups and downs, according to Alleghany County Manager Don Adams. Like Jackson, Alleghany hopes the extra money from the tax increase — which means more money at its disposal for tourism marketing — will turn the tide.

Most of the protests in Jackson County have come from the Cashiers and Glenville area, where posh inns, golf course resorts and B&Bs cater to a well-heeled, but increasingly frugal, crowd.

But the fear of hardship to come via any increase is the same in Sylva. A block or so from the Amin’s hotel at the Blue Ridge Inn, far from the Cashiers area, Pete Patel is equally worried. Patel and his wife have owned and operated the 33-unit hotel for eight years.

“The summer was OK, but the winter is going to be tough,” Patel said, adding that he hopes commissioners won’t move forward with plans to hike the tax.

Those fears might be overstated.

Linda Harbuck, longtime executive director of the Franklin Area Chamber of Commerce, said she hasn’t noticed any particular decline in Franklin’s hotel stays since that town went from a 3 to 6 percent room tax. While Macon County’s base room tax rate is only 3 percent, the town of Franklin tacked on an additional 3 percent in the town limits.

“They seem to do all right,” Harbuck said.

The story is the same in Henderson County, which a year-and-a-half ago raised its room tax from 4 to 5 percent. Karen Baker, spokesperson for the Henderson County Chamber of Commerce, said that the tourism group has not seen a visible decrease in room stays since the increase.

“There are always two sides whenever there is an increase in a tax, but it hasn’t seemed to hurt occupancy,” Baker said.

Hotel owners in Jackson County beg to differ.

Raise the room tax, and it might drive tourists away and cost the county jobs, Amin and the other hotel owners said. Amin said she’s finding it difficult enough to earn the required $8,000 or more each month needed to pay the hotel’s bills.

Larger hotels are also feeling the dour economy’s tight squeeze.

“We hope that our county commissioners will hear our concerns and ease our fears,” said Megan Orr, director of sales for Best Western Plus River Escape Inn & Suites in Dillsboro. “Prospective customers make informed choices and will see and feel the difference of our higher taxes compared to our neighbors.”

 

How Jackson’s room tax stacks up

Two-thirds of the state has a higher room tax rate than Jackson County. With a tax of only 3 percent, Jackson is one of only 33 counties with a rate that low.

Jackson County leaders are debating whether to take the room tax rate to 6 percent — a rate share by roughly 30 other counties. Here’s some of the other rates in Western North Carolina:

• 3 percent: Jackson, Swain, Macon, Clay, Graham, Mitchell, Yancey

• 4 percent: Haywood, Buncombe, Transylvania, Cherokee

• 5 percent: Henderson, Madison, McDowell

• 6 percent: Town of Franklin, Watauga

Do-over an option in Jackson tourism spat

It’s not too late for Jackson County leaders to go back to the drawing board on a state bill that consolidates the county’s two separate tourism agencies.

Commissioners have found themselves in the hot seat over a bill that would do away with the Cashiers Travel and Tourism Association and instead merge it with a single countywide entity. Cashiers tourism leaders have decried the plan. They argue that Cashiers needs its own tourism agency — with its own funding stream — to cater to its own unique visitor demographic apart from the county as a whole.

Those who support a merger believe it would be more effective, eliminating the duplication that currently exists and putting the money to wiser use.

The idea to merge the Cashiers tourism agency with the greater Jackson County Travel and Tourism Association was embedded in a bill to raise the room tax on overnight lodging from 3 to 6 percent. Raising the room tax was the chief objective of the bill and was supported by the majority of commissioners. But the origin of other parts of the bill is murky and has been blamed in part on a legislative mix up.

N.C. Rep. Phil Haire, D-Sylva, appeared before the Jackson County commissioners this week to let them know the bill can be changed if they don’t like it. Haire even took the prerogative to bring a new, marked-up version of the bill that would undo the changes made by the previous bill passed this summer.

That seemed to irk at least one commissioner, who asked Haire why he would bother drafting changes to the bill before commissioners officially decided whether they wanted any changes. Commissioner Doug Cody was confused how the bill had been preemptively rewritten.

“Who is the author of this?” Cody asked Haire of the new version.

Haire said he took the initiative to revise the bill based on feedback he’d gotten. Feedback from whom, Cody wondered.

“I didn’t realize we were doing an opinion survey of what changes we want to see,” Cody said.

“If you don’t like it, we will throw it in the waste paper basket,” Haire said of the new version.

It became clear that in Cody’s eye, Haire had jumped the gun with new language before the majority of commissioners reached a consensus on what to do.

“I think this needs some work,” Cody said.

County Manager Chuck Wooten portrayed it as a miscommunication. Wooten said he passed along the concerns raised at the last commissioners meeting over some aspects of the bill. Haire perhaps thought the concerns were universally shared by the commissioners when in fact the only commissioner vocalizing any concerns has been Commissioner Mark Jones, who works in the Cashiers tourism industry and sits on the Cashiers tourism board.

“I believe Mr. Jones is the only one that spoke up as having these concerns,” said Wooten.

Commissioner Charles Elders said commissioners need to decide collectively how, if at all, the bill that passed should be changed.

“We need to get our thoughts and recommendations together of what we would like to see,” Elders said.

Haire said he intended the new language to simply be a “starting point.”

While commissioners said Haire was premature in penning a new bill, Haire’s point was clear. The bill can be changed — and that lands the ball and all its political repercussions squarely back in the commissioners’ court.

Until now, the county had blamed at least part of the controversy on an unintentional hiccup in the legislative process: the bill that ultimately passed in Raleigh was not what the county initially asked for.

Haire didn’t intentionally set out to introduce and get passed a different bill than what county leaders wanted. The county failed to make its request in time last spring. By the time they asked Haire for a bill to increase the room tax from 3 to 6 percent, the deadline for introducing new bills had passed. So Haire looked around for a similar bill to piggyback on. He found one from Alleghany County, which was also looking to raise its room tax, and tagged Jackson County’s name onto it as well.

But in the process, the language didn’t come out quite right, Haire said.

Commissioners had partly disowned themselves from some of the controversial parts of the bill — instead directing blame at a bureaucratic system of lawmaking.

But, Haire now says it is no problem to change it — putting commissioners on the spot to either stand behind the bill in its current form or tell Haire how they want it changed.

“I hope we can get it the way we eventually want it,” Haire told commissioners helpfully.

Haire did explain that the state’s travel and tourism branch wants to bring uniformity to the myriad of tourism bills for each county in the state, and there is pressure to use similar policies and language, he said.

Commissioners plan to take the issue up in January.

 

Concerns with the Jackson County room tax bill

Jackson County commissioners plan to increase the tax on overnight lodging from 3 to 6 percent. Doing so requires permission of the N.C. General Assembly. A special bill to increase the tax was passed in Raleigh earlier this year at the county’s request. The language in the bill calls for other changes to the county’s two tourism agencies as well, including:

• Create a single countywide tourism development authority. Currently, there are two — a Jackson County Travel and Tourism Association and a separate Cashiers Travel and Tourism Association. The Cashiers tourism arm currently gets 75 percent of the room tax generated in the Cashiers area to spend on its own marketing.

• Expand how the tourism tax revenue could be spent. Currently, the money generated from the room tax must go solely to tourism marketing and promotions. The new bill would allow money to be spent on “tourism-related activities,” including capital projects. Putting on festivals, building greenways or assisting the Great Smoky Mountains Railroad with the cost of an engine turntable could all be legal uses of the tourism revenue under the new bill.

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